We are a fast-moving consulting firm that helps companies, industries and
countries better compete in the global marketplace. Our work focuses on
research-based strategy matching client capabilities with market needs thereby
matching what you can do with what the customer is looking for. It's a logical
and winning combination.

How often do we make decisions based on our own internal beliefs only to find
that the market never felt that way at all? As the old phrase goes, we simply fail
to see the forest for the trees... time and time again. The Corporate Myopia Blog
explores situations that may have gone better had someone stopped to ask what
the long-term vision, mission or strategy is and whether current events really are
valid to long-term direction.

If you're more comfortable with Spanish,
please call
César Hernandez at 212-444-7193.

(We can probably accommodate you in Croatian, Italian
and a little Mandarin too.)

We'd love to give you our email addresses but it seems
to initiate a cascade of spam, from those awful web crawlers,
so if email is your preferred mode of communication,
please enter your name and email address below
and we'll contact you right away.

Name

E-mail

Company

Message

Posts tagged with Situation Analysis

With each passing day, it seems as if the rich get richer, the poor get poorer and while our economy expands, the divide between rich and poor gets wider and wider. Sound like an exaggeration? Perhaps not. Read Neil Irwin’s article in this past weekend’s NY Times, “The Benefits of Economic Expansions Are Increasingly Going to the Richest Americans”. Irwin cites data compiled by Pavlina R. Tcherneva, an economist at Bard College to prove this disturbing trend, although none of this should be a surprise.

Two charts in the article tell the story well. The first (below) shows the share of income growth received by the top 10 percent and bottom 90 percent of earners during periods of economic expansion.

I grew up in the 1950’s and 1960’s, began my work career in the 1970’s and reached a modicum of business success in the 1980’s and 1990’s. My father was a doctor. We went on family vacations when I was little. I went to good schools and ultimately raised a family and owned my own business. I wanted for nothing. Life was and still is good. As a child and teen growing up in inner city Detroit, it always seemed like the auto factories were humming, the shops were full and growth in prosperity, while not perfect, was being shared.

According to I.R.S. data, I’ve been among the 10% who’ve benefited from expansions for many years. Yet, it doesn’t take much other than a look at the daily papers or a walk around any American city to see that something doesn’t seem quite right. Shoppers seem well-heeled, coiffed and comfortable among my top tier peers. But why, I wonder, when I walk into Home Depot, Walmart or the local supermarket, I rarely see exuberant shoppers from lower and middle classes? You may think it’s the stores I shop in only cater to my types but I travel and like to walk around and check in on the retail scene to get a flavor of the local zeitgeist.

The second chart from the article (below) shows the share of income gains during expansionary periods that went to the top 1 percent versus bottom 99 percent. The trend in wealth gains becomes even more striking.

Before I saw these charts. I always thought things seemed to change for the worse in the 1980’s. That was when the idea of “trickle down economics” came into vogue and was put into practice. The idea was that if we cut taxes for the well-off, the additional amount they gain will “trickle down” to the middle and lower classes. But I always wondered how that could be. After all, I could only buy one car every few years, one boat, one house, etc., nothing like what hundreds, thousands or millions of people making less than me could do if they had the money. So how could the benefits that I and my fellow 10 percenters (alas, I’ve never made it into the top 1%) really make a difference in the prosperity of all. The answer as we can see from the data is that they couldn’t and haven’t.

Political forces on the right are quick to criticize programs that provide targeted job training, assistance to inner city residents and businesses, raising the minimum wage or any program that puts more money toward raising the lower class and taking away from the wealthy. Their answer is always to just lower taxes as the benefits will trick down for all. It’s been nearly 35 years since we’ve been practicing “trickle down” and we haven’t seen it trickle anywhere yet except to the top. In case you’ve forgotten Einstein’s oft quoted definition of insanity, it seems to fit here: “Insanity is doing something over and over again and expecting a different result.”

Our Congress can’t seem to do anything constructive to pass sensible solutions and our President can’t persuade them to because one party thinks it’s its job is to undermine his term. And we go to the polls and re-elect the same clowns who can’t interpret the data, read the charts or come up with any compromise that might try something different to help. In 1811, a smart guy named Joseph de Maistre, wrote “Every country has the government it deserves.” We often think that quote was intended for our “exceptional” America. It was actually directed toward Russia, a country, then and now, of rich oligarchs separated from the lower classes by their profligate wealth. Sound familiar?

Everybody knows Christmas can be a challenging time. Gifts, parties, family, travel, decorations, cards all can present vexing problems to solve every year. For me, an appropriate card is probably the toughest thing I face. Every year, my friend George and I develop a cartoon to use as our card and it’s not easy.

You see on the side, we’re cartoonists or I should say a cartoon team. George draws and I write except when he draws and write or I change his drawings with photoshop and write or he draws and his wife writes or my wife and kids make suggestions. But however it’s done, we come up with a collaborative effort every year that goes on our website GigundoIndustries.com

No doubt you’ve heard of Gigundo Industries, the largest, non-existent, virtual company in the world. If not, you better visit the website as soon as possible for there are hundreds of cartoons there for you to peruse and even buy.

In a way, creating cartoons is similar to writing strategy. You take a complex set of facts and distill them down into something simple that cuts through the clutter. Only with cartoons, you place that simple statement in an unusual setting such as a psychiatrist’s office, caveman times, a prison, the North Pole or Santa’s workshop.

There was so much news this year that was fodder for our a year-end card. Off course, most prominent and recent in our minds was the malfunctioning of healthcare.gov and that led to an idea that really didn’t require any drawing at all.

But we quickly nixed that idea because who could possibly make jokes about their government failing at something, let alone Santa? I mean nobody wants the government to fail. Right? Yeah, right.

So then we moved on to the saga and embarrassment of Edward Snowden and the NSA snooping and came up with this:

But not exactly an uplifting story and we were looking for something more upbeat. So we moved on to a couple of positive stories. First, the extraordinary first-ever resignation of a Pope got us wondering if that could ever happen to Santa.

Then came the idea that the battle for gay marriage might even have reached the North Pole. (No, this is not for you people at Fox News who think gay marriage may as well allow us to marry a goat. Who’d marry a goat anyway?)

We just weren’t satisfied yet and then read the news that “Selfie” was the word of the year and would enter the Mirriam-Webster Dictionary. Santa can get in on that too.

Finally, we hit upon it, an idea that would really take us into the future but have that bit of mixed message that might cause us to wonder whether things are as they should be. 2013 also became the year of the drone, for both reasons that frighten us and, thanks to Amazon.com, frighten us. Just think if Santa employed some new technology.

That’s our holiday collection for 2013. They’ll all go up on our site at GigundoIndustries.com soon. Let me know which you like best. Now, it’s back to my day job. Everyone at Futureshift and GigundoIndustries.com wishes you the best of Christmas holidays and a great 2014.

I went to a wine event today in New York for the Bordeaux wine region. While there, I asked the representative of one of the wineries, “What’s your strategy for the U.S.?” She responded, “Strategy? Why do we need that?” I gave her some reasons but the conversation didn’t go very far.

When I returned to my office, I got an email from the Pew Research Center titled “Experts rank the top 10 global trends.” When I clicked on the link, I found a report from the World Economic Forum on the 10 most important global trends based on a poll of 1,592 leaders from academia, business, government and non-profits. Here’s the list:

Rising societal tensions in the Middle East and North Africa

Widening income disparities

Persistent structural unemployment

Intensifying cyber threats

Inaction on climate change

Diminishing confidence in economic policies

A lack of values in leadership

The expanding middle class in Asia

The growing importance of megacities

The rapid spread of misinformation

So what do these trends have to do with something as everyday as buying a bottle of wine? Plenty.

It’s great that a provider of any product or service believes theirs is the best but neither consumers nor b2b markets think in linear terms. Every decision is made in relation to another. If I’m nervous about the state of the world, that will effect how I make decisions, and what and when I buy. If I’m an importer or distributor and concerned about unemployment and the impact of economic policies, I may want to hedge my bets with tighter inventory control. As people focus on the macro trends that affect us all, how companies approach the environment, social responsibility and their own governance (ESG) effects our perceptions of their brands. It goes on and on whether you’re a consumer or corporation (remember, somebody once said, “Corporations are people, my friend.”)

If you don’t have a strategy that helps you wind your way through this maze or a brand with values that reassure consumers and customers, you’re dead in the water and it won’t matter how many fancy events, e-newsletters or facebook followers you have.

Something else was interesting to me at today’s Bordeaux event. As I went around and asked people about their wines and what makes their winery better than the rest (to which there were a lot of blank stares), nobody asked any questions about me, about my tastes, concerns, or needs. They may as well have been Enomatic wine dispensers with an information rack underneath. Most handed me a sheet of paper about their wines in answer to my questions anyway.

There was neither strategy present nor any attempt at customer engagement. I imagine the woman who asked me why her company needs strategy poured a lot of wine today. At the same time, it wouldn’t surprise me if at the end of the day, she moaned about some of the trends on the list and how they were making life more complicated. That’s too bad. Strategy is the direction that helps us wind our way through and around those trends and we all give our loyalty to those that help us do that.

FutureShift asks a lot of questions and listens carefully so that brands and strategy resonate with customers to increase their engagement and loyalty. It works.

There’s always a rush these days to get plans into action. Action is what we value, just as we’re always looking for someone who “can hit the ground running”. But what if they’re running in the wrong direction? And how do you know in which direction to run?

The answer to that mistakenly comes in businesses doing what they’ve always been doing and whenever possible just running faster. In the accelerated competitive environment of New York City, we’ve become accustomed to stores, restaurants, professional services and even hospitals suddenly disappearing. These businesses failed even though they worked harder and ran faster than anyone around them. Why did they fail?

Most likely, they never asked their customers whether the direction they were going, the products and services they were offering or the benefits they perceived internally met customer needs. It’s the rare manager or entrepreneur who can intuit what the market is looking for. Otherwise, there would be a lot more people like Steve Jobs around. Businesses have to get feedback from their customers and understand how to match their offerings with what customers are seeking.

Not surprisingly, customers often see product plusses and minuses in completely different terms than the companies selling them. The best advertising campaign in the world won’t convince customers that they should be seeking something different. We’re just not in that linear world of the 1950s and 60s when we could be told what detergents make our clothing cleaner and then march in lockstep to the store to buy them.

Of course, businesses don’t always listen to their customers because internal beliefs are so strong as to refuse to change their strategy to meet customer needs. Here are three examples to consider:

Several years ago, we were asked by the Chilean Pisco industry to provide a strategy that would open up the U.S. market for them. If you don’t know Pisco, it’s an eau de vie, somewhat like a refined grappa, that’s made in Chile and Peru. Our research found that bartenders believed it made most vodka-based cocktails more interesting and one of our key strategic recommendations (futureshiftpisco.com) was to unleash the creativity of bartenders with a series of tactical programs that would challenge them to develop great Pisco-based cocktails that their customers would love. But Chile is a country where perfection in planning is highly valued and established. That works when building bridges, tunnels and skyscrapers, of which you’ll see many in Santiago these days but not when variable decisions are involved as with bartenders and their customers. The Chilean Pisco industry decided to design several “perfect cocktails” that they could then promote in the U.S. The result? Peruvian producers who gained a better understanding of the U.S. bartender now dominate the market. There’s still time for Chile to adapt as Pisco still is not well known in the U.S. They simply have to acknowledge that their customers have more power than they do. Easy, right?

While we’re on Chile, let’s move to technology. This time the Chilean technology industry told us they wanted to sell their growing tech industry to U.S. companies. Chile had already achieved tremendous success in establishing itself as a successful place to locate an offshore tech center. Now, they wanted to have a presence inside the U.S. to provide SaaS and enterprise integration products. Again, we spoke to prospective customers for these talented Chilean companies and were told that if they could establish partnerships with Chilean companies in Latin America, a piece of their U.S. business would likely follow. (FutureshiftChileIT.com)In other words, help us in your territory and then we’ll reward you in ours. U.S. companies wanted to understand the Chilean miracle and how it had become an export powerhouse. But just as with Pisco, the forces that worked internally in Chile were too strong to persuade them to adopt a market-oriented strategy in the U.S. Six Chilean IT companies came to the U.S. trying to sell their services based on low prices. But why go to a company thousands of miles just for low prices when that can be found down the road? Today, there is only a small amount of programming work going to Chilean companies, as talented as they are.

Most recently, we conducted a research and strategy project for the Maine lobster industry. Following 200+ interviews, there were a number of findings in that report that showed how Maine lobster possesses attributes to restaurant and hotel chefs that were not being considered within the industry. There is ample opportunity for the Maine industry to differentiate its brand from all competitors. However, lobstering is a traditional industry and change does not come easily. Like the two Chilean examples, internal beliefs in Maine are strong. Most lobstermen are focused on their first transaction with a dealer when they bring their catch to the dock. The needs of restaurant and hotel chefs can be perceived as a distant concept and there is little patience for the time it takes to raise the foodservice market’s demand. The local dealer and summer tourist who loves to sit at the water’s edge, even though they both pay rock bottom price, is more concrete. It’s been that way for more than a hundred years so change, despite market feedback, isn’t easy. There’s cause to remain optimistic but it remains to be seen whether Maine’s lobster industry adapts.

In each of the above cases, the right strategy began with listening to customers. That helped set a direction for the industry to go. But at that point, industry members often put up obstacles to change. After all, it’s far more difficult to do something new than the things you’ve been doing for dozens of years, even though they may not be working.

FutureShift develops brands and rebranding programs by understanding how customer decisions can increase engagement and loyalty.

Business managers and their consultants often talk about strategy, yet they frequently misunderstand what strategy is, why it’s important, and how objectives, strategy, tactics and goals are related. The confusion seems to exist because our business culture values action. “I’m looking for someone who hits the ground running,” is a common refrain from CEOs who believe action is what creates results. But the real question is “what direction are they running?” Action without direction is meaningless or even harmful to the potential success of a business.

It’s simple enough to say that “objectives are measurable, strategy is direction, and tactics are actions.” Yet, the question still asked is: “How many strategies should we have?” Of course, if strategy is direction, how many directions can you go at the same time? No wonder we’ve become accustomed to business plans underperforming. Marketing departments and their agencies often don’t know what direction they’re going or they create separate strategies for each tactical execution. Consequently, tactical programs may have no clear direction or consistent messaging and the result is that they get lost in the competitive clutter.

Building a business is like crossing the ocean

A clear example of an objective, strategic options, and tactics may help clarify the confusion. Suppose, for example, we decide to sail a boat across the Atlantic Ocean. This isn’t something most of us will ever do but objectives, strategy, tactics, and goals as well as research, even management teams, become crystal clear when setting out to cross the ocean and they’re no different than they are in business.

For fantasy purposes, we can become part of the idle rich and plan to sail our boat from the Chesapeake Bay area to the mouth of the Mediterranean in late June. Why not? The Mediterranean is a nice place to spend the summer. Since we’re in a hurry to get there in time for party season, we’ll set an objective of reaching the Mediterranean in 20 days. So now, we’ve set an objective and it’s measurable. We can break it down further to measure our progress along the way. It’s about 3,800 miles in a straight line across, which means we’ll have to average about 190 miles every 24 hours. That will require an average speed of 7 nautical knots per hour (a little more than 8 miles per hour). That may sound slow but we’re dependent on the vagaries of the wind and weather conditions as we sail across. More importantly, we now have a set of metrics by which we can measure our progress, a key component of objectives.

To take our fantasy voyage further, we’ll need a boat and considering our objective, we might want one that’s about 60 feet long, something like the one in the photo. This boat is called a Swan 60 and is made by Nautor in Finland. Nautor makes safe, fast and beautiful boats and we’ll pay a pretty penny for the privilege of owning one. Fully equipped, we’re looking at around $3.5 million but hey, it’s only money! The good news is that the Swan 60 has what’s called a hull speed of about 10 knots (approx. 11.5 mph). Without going into a technical definition, hull speed is the approximate maximum speed a boat can go. The exception to hull speed is when a boat surfs in high winds on top of the waves. If we can get our Swan 60 surfing, we can probably sail at speeds well over 15 knots. So averaging 7 knots across a 3,800 mile span of ocean does not seem out of the question.

Now we have our boat and you can think of it the same way as we might a business. It has an owner (a wealthy one) who may or may not be “skipper” (no jokes please) or managing director. We’ll need a navigator, who can be compared to a combination of a Chief Technical Officer and Chief Strategy Officer, and a Tactician, our Chief Operating Officer to keep us going at maximum speed. Then we’ll need some specialists, people who excel in working in different areas of the boat and handling a 60-foot yacht’s large sails. Also, we’ll need an experienced sailboat cook who knows how to keep a crew happy while being tossed around in large waves. We’ll want experience all around as ocean sailing is not for novices. In all, our team may total 14 people. Our boat only sleeps seven but we’re sailing non-stop 24/7 so we’ll need enough people to manage the boat while others sleep.

Selecting a strategy

You can see by now that we’re building a small company that has an ambitious objective. Now, it’s time to select a strategy, a direction we’ll take to reach the Mediterranean on time. We have some difficult choices to make. It’s time to do some research.

We’ll study historical weather patterns, learn the prevailing winds, ocean currents, note the islands or hazards we might see along the way and course taken by other boats making the same crossing. We learn that there are three optional courses across, each with its strengths and weaknesses. We can devise a SWOT analysis (Strengths, Weaknesses, Opportunities, Threats) for each of them. The map below shows our choices.

Course 1: High-risk; High-reward

This is a strategy that has some clear risks but also enticing opportunities. It takes us northeast along the U.S. and Canadian coastlines. As the prevailing summer winds are out of the southwest, we’ll be sailing downwind, which should give us more speed. We’ll also be assisted by the Gulfstream currents, which run along a path from the Bahamas northeast into the Atlantic at an average rate of 3 knots. Then, if weather patterns hold, we should have good winds reaching down the European coast to get to our destination. The risk is that we’ve added about 1,000 miles to our course, which means we need to average 9 knots, which is pretty aggressive. Another risk, more precisely, a threat, is the possibility of sailing among drifting icebergs, once we’re off the Labrador coast. Our research has told us that iceberg fields breaking off from the Greenland glaciers are common during the summer months. That’s not a problem for us during good weather but it’s difficult to see an iceberg at night (memories of the Titanic). So in the end, we have a potentially fast crossing to meet or exceed our objective but with some significant risks.

Course 2: Shortest Distance

This is a strategy that takes the shortest possible course using the curvature of the earth to shorten our path. It still has the potential risk of icebergs but it is more manageable if this becomes a problem. We’ll gain less of a push from the Gulfstream and may find ourselves stuck with low or no wind for days in a mid-Atlantic high-pressure system, but it seems to strike a middle ground that still makes our objective within reach.

Course 3: Nice & Easy

This strategy is the most conservative. It enables us to stop along the way in both Bermuda and the Azores, enabling us to replenish our supplies 700 miles east of the U.S. and about 1,000 miles west of the Mediterranean, with a gap of about 2,000 miles in between. This course reduces the risk of being exposed to extreme weather along the way and allows us to spend a night or two in safe harbors along the way. The risk is that high-pressure centers regularly sit in the middle of the ocean in late June and we could have to drift windless or move at low speeds for days. This may make it difficult to reach our objective on time. (BTW, this course appears shorter when viewed as flat surface but is longer when going around the diameter of a sphere.)

Our three strategies are not too different from what we may see in business, one that is high-risk, high-reward, one that is safe but potentially slow and one that is a middle ground or compromise between the two. Which should we choose and what happens if we recognize that we’ve made a mistake?

Suppose we’re aggressive and have tremendous confidence in our abilities to manage the boat and navigate the seas. Past success might even blind us to some of our weaknesses. When hubris takes over decision-making can be reckless (memories again of the Titanic…or hundreds of failed businesses). Let’s assume we select the high-risk course that takes us far north but in doing so, we either find the hazards of icebergs to be too many, the seas to be too rough or even the winds to be less than we anticipated. As a result, we decide to change strategies and move mid-course to another direction. One look at the “course change” on the map shows the cost of making this correction, which is likely to make our objective much more difficult to reach. The lesson, of course, is that selecting the wrong strategy and making a change has costs, which can be significant.

Tactics and goals

What about tactics and goals? How do they factor in and how should we think of them. During any period of time, we’re going to take specific actions to increase the speed of our boat. We might put up different sails, larger or smaller, to better take advantage of changing winds. Or, we might want to be on a slightly more advantageous course to gain speed. These are tactics but are not strategy, as they don’t alter our overall direction in reaching our objective.

Imagine a boat (or a business or someone who hits the ground running) that is all tactics but has no strategy. It would always take every possible action to increase its speed regardless of the direction it is heading. It might even go in circles and get nowhere very fast. Tactics will not reach a productive objective without strategy to provide guidance.

Finally, where do goals fit in? Goals are long-term milestones that you want to achieve. (e.g. “I want to be a better sailor/manager/person.”). Objectives are fixed and have specific requirements, which can be measured. Objectives have structure; goals do not. Goals can never be accomplished without objectives but objectives without goals won’t create the long-term change you desire.

Hopefully, that clarifies things. Following college, I crewed on a large sailboat crossing the Atlantic. Our owner chose “Course 3: Nice & Easy” and we paid a price for it. It was slow, slow, slow – 27 days across. But one of my strongest memories of that trip was listening to our marine radio and hearing reports of sailboats dodging icebergs in high winds only a thousand miles to our north. It was an example of how the wrong strategy can have its costs, either going too slow or too fast, but it cemented the concepts in my mind forever.

At FutureShift, we provide research-based strategic services, but are often asked to run workshops that help clarify the confusion around objectives, strategy, tactics and goals.

No, Michael Porter is not dead. Only the consulting firm that he co-founded in 1983 is gone. Today, the global accounting giant, Deloitte, announced that it had completed its acquisition of Monitor, which had filed for bankruptcy this past November. As reported in The Economist last November 14th, the once proud firm, “was able to compete with the likes of much bigger McKinsey, the Boston Consulting Group and Bain.”

No mention was made in the announcement of what role Porter might play in the newly formed division of Deloitte but he remains a highly regarded professor at the Harvard Business School.

Businesses come and go all the time and acquisitions are a daily occurrence. What is of note here is that Monitor was founded by a man acclaimed as one of the great business strategists of the past century, and more importantly by his principles, best known as “Porter’s Five Forces”. Under the guidance of the Five Forces framework and Porter’s fame, Monitor’s legions of consultants found millions of dollars of billable work among foreign governments, multi-national corporations and commodity boards. That work began to dwindle in 2008 when Monitor had to seek a series of loans from its partners and venture capital firms in order to stay afloat.

In the November issue of Forbes, contributor and business author, Steve Denning, uses his rapier-like writing skills to tear apart both Monitor and the philosophical approach behind it. In other words, he does some dancing on Porter’s grave. While the article is now two months old, it makes for compelling reading if you were a believer or doubter of Porter’s framework. Put me in the latter camp.

I first read Porter’s seminal article in the Harvard Business Review, “How Competitive Forces Shape Strategy” in 1979. I was one year out of business school and a loan officer in a commercial bank. My mantra was a phrase coined by another business guru, Peter Drucker, and known as “Managing by walking around.” The idea is that by engaging with people both inside and outside an organization, managers can best understand how their companies, products and management styles are perceived, how they perform and what to do about them. That’s a simple concept that one could explain in an elevator between the first and second floors.

It served me well then and has since as I’ve made the practice of engaging with both internal and external audiences to find the intersection between internal capabilities and external needs as the place to find the sweet spot for successful strategy.

Porter’s Five Forces, on the other hand, require a much longer elevator ride. The idea is that by managing a framework of five market forces, a company or industry could find sustainable competitive advantage. “The state of competition in an industry depends on five basic forces…The collective strength of these forces determines the ultimate profit potential of an industry.”

I can’t say I fully understood it in 1979 and I can pretty much say the same today. I looked at the model then as I do now and ask, “Why is the competition at the center? Why not the customer?” Drucker taught that the only valid purpose of a business is to create a customer. Yet, here was Porter, saying that it’s all about dominating the competition.

I had a memorable meeting at Monitor’s Cambridge headquarters in the early nineties. At the time, I was doing some consulting for the government of Chile on export promotion, inbound investment and tourism development. Monitor had built up a practice in consulting in these areas and proposed a partnership. I felt this might add some prestige to the project. At our meeting, one of their senior consultants explained how they would apply the discipline of the Five Forces to the project. He drew lots of squares and circles on the board labeling them various types of competitive clusters and argued that it was winning against competing countries, not customer perceptions that would win the day for Chile.

I left there confused and unconvinced that the focus should be on “competitive clusters” rather than matching what Chile offered with customer needs. If you spend your time focusing on rivalries, you’re losing time creating more innovation to meet growing market demands and before you know it, your competition will be your problem. As the famous baseball pitcher, Satchel Paige, said, “Don’t look back. Something might be gaining on you.”

As Steve Denning notes about Monitor, “Its consultants were not people with deep experience in understanding what customers might want or what is involved in actually making things or delivering services in particular industries or how to innovate and create new value.”

Today, factors such as globalization, the Internet, and the growth of social media have heightened the importance of building strategy around customers. Now that the world is flat, customers decide who wins in every industry and political arena. As Denning ends his article, “Monitor was crushed by the single dominant force in today’s marketplace: the customer.”

It’s hard to argue against the man who is one of the most cited scholars in economics and business and whose ideas are widely used by business and government leaders around the world. But we are in a different time where the key is satisfying customer needs for innovation, whether they be in features, quality, service, or value. Companies like Apple, Amazon, Fresh Direct, and Kayak are just a few of the examples of how our flattened world has given power to customers.

Our consulting approach is to put customers at the center and to understand their frustrations. After all, a frustration is simply an unmet need. Find the innovation to serve that need, erase the frustration and you’ll find a successful business — that’s a short speech in any elevator.

I recently ran my “Should we politicize tragedy post?” on a University of Michigan alumni discussion group on Linkedin. There were a lot of interesting and reasonable comments but overall, I was stunned by the vitriol that came my way from people who believe we are one step away from Nazi Germany and the Soviet Union – and yes, the two were mentioned in the same angry post without any sense of irony. There also were stern lectures from many who absolutely, positively knew what the framers of the constitution had in mind, even though that was 223 years ago.

A lot of these people would like to think that the authors of the second amendment were wise, prescient men looking far into the future and recognizing that there could be a need for armed insurrection against tyrannical (perhaps even Socialist or Fascist – take your pick) governments, that would require assault weapons for every man, woman and child in America. You may need to read that again to fully absorb that. Those people are out there, sure of themselves and if you’re one of them reading my blog, you may wonder where you took the wrong turn.

What seems to make sense to me is that times then were not a lot different than they are now in one respect. People often did things for their own interests and to serve the needs of the present day or in the case of the second amendment to organize the U.S. military and defeat Indian tribes who were preventing us from acting like most colonial powers (defeating the natives, occupying lands and annexing territory, i.e. our history). I know that’s anathema to all the faux Constitutional scholars and volunteer armed guards out there who lectured me but to others, you might take a look at this essay written by my friend, Eric George, after doing some historical research. As with the title of this post, it’s called, “Chief Little Turtle and the Second Amendment”.

“During the American Revolution there emerged a great Native American military leader. His name was Michikinikwa in the Miami-Illinois language; the closest English translation was Little Turtle. Born into the Miami Tribe in what is now Illinois, he came of age fighting French troops allied with the Continentals in the Northwest Territories (present day Ohio and Indiana). In 1780, General Augustin La Balme, after a successful raid against the British, made the grievous mistake of burning down a Miami village. Little Turtle tracked down La Balme and killed him, along with many of his men. He was by now a War Chief; he proved invincible in battle and his stature rose dramatically over the ensuing decade.

After the British ceded the homelands of their Native American allies to the United States at the Treaty of Paris in 1783, Little Turtle responded by forming a new Confederation of his own. He allied the Miami with the Shawnee under Blue Jacket and the Delaware under the command of Buckongahela. Their resultant victories against U.S. militias (the Continental Army having been largely disbanded after the Revolution) helped to expand their Federation to include the Ottawa, Wyandotto and even some of the fearsome Iroquois.

After the Confederation defeated the 1400-man force of General Josiah Harmar in October of 1790, a thoroughly irate President George Washington had had enough He ordered General Arthur St. Clair to march against Little Turtle with a combined force of former army, conscripts, and militia numbering over 2,000 men, to begin by the summer of 1791. The ill-equipped force did not leave Fort Washington (think Cincinnati) until October. By early November, fewer than 1000 troops remained due to desertion and disease when they camped deep in Miami territory. The result was as predictable as it was disastrous. Confederation warriors surrounded St. Clair’s loosely guarded encampment under the cover of darkness and slaughtered over 600 men (and probably another 200 camp followers) at first light. Nearly all survivors were wounded. By comparison, the Colonies had lost 88 men at the Siege of Yorktown, the last major battle of the Revolutionary War. St. Clair’s defeat stands as the worst loss of life by U.S. forces in all the Indian wars. The casualty rate, in percentage terms, remains unsurpassed by any other conflict in any war to this day. In a matter of hours, the Western Confederacy had annihilated one quarter of what remained of the U.S. Army. The staggering loss of life generated both public fear and outrage; George Washington fired St. Clair and the first-ever Congressional investigation into the Executive Branch was initiated.

It was no small wonder that scarcely a month later, on December 15, Congress adopted the Second Amendment to the U.S. Constitution. The Amendment read:

“A well regulated militia being necessary to the security of a free State, the right of the people to keep and bear arms shall not be infringed”

At the time, the right to bear arms was a given, as was the existence of now extinct militias. Probably the most important words in the above Amendment, at least in 1791, were “well regulated” for Little Turtle had conclusively proved the new Nation utterly lacking in that department.

By word and deed, the Second Amendment was effective. Five months later, in May 1792, Congress passed the Militia Act, setting minimum standards of readiness. Among these were “a good musket, a sufficient bayonet, two spare flints, a knapsack, and a pouch containing at least 24 cartridges.” In other words, just showing up was no longer acceptable.

In the summer of 1794, the Legion of the United States, well equipped and better trained, defeated the Western Confederacy at the Battle of Fallen Timbers, near present day Toledo, Ohio. Casualties were modest on both sides. Little Turtle eventually became a peacemaker; he finally met with Washington, and later on with John Adams and Thomas Jefferson. He died in 1812, and was honored with a full military funeral.

The young nation that finally defeated him would clearly be unrecognizable to him today. It has grown to have dozens of cities with more inhabitants than most of the original States in their entirety. Its economy has become the world’s largest, an innovation engine for the entire planet. The venerable militias have long since been replaced by State and local police forces, and a professional military that rules the land, sea and air. The United States has become the most powerful Nation on earth. Its citizens now have little to fear, except each other. For the Second Amendment that was written in large part to defeat Little Turtle and his Confederacy has now enshrined the use of a different sort of musket by our populace.

Weapons with a destructive force that our Founders could not have envisioned are now ubiquitous in America. With roughly nine guns for every ten civilians, the U.S. dwarfs all other nations in per capita gun ownership, with the possible exception of Yemen. To the astonishment of the developed world, we trade assault rifles and semiautomatic handguns freely in unregulated markets. Our firearm related death rate last year was forty times that of our Founders’ old adversary, Great Britain. Mass killings have become commonplace. In the world’s most wealthy and powerful country, parents are now afraid to send their children to school. Chief Little Turtle won a far greater victory over the White Man than he ever imagined.”

It’s a nice story that our Constitutional authors sat around pondering the future and how we might need to overthrow our government but the reality is that we had just finished overthrowing Great Britain, were bogged down fighting Indian Wars and dealing with the spectre of other adventurous European military forces. Rather than think about how these men saw the future, we might ask what motivated them in the days in which they lived. So, thank you Eric for this essay. I enjoyed it and hope it gets some comments but please, save the vitriol for other venues.

As many of my friends and associates know, I create a holiday cartoon every year with my good friend and former business partner, George Hughes. This is the twelfth year that we’ve created a cartoon as the centerpiece of our holiday card. George and I used to own an advertising agency together and we began to create cartoons there as one of the agency’s creative teams. Now, as owner of my strategy consultancy, Futureshift, and George, who has gone onto wherever old artists go, continue to take on this annual project.

George illustrates and I write, although our best work has always come from equal collaborations. When I moved to New York in 2000, through a series of coincidences, the famous cartoonist, Jules Feiffer, saw a few of our cartoons, liked them and sent me to The New Yorker to meet with their cartoon editor, Bob Mankoff. When I called Mankoff, I used Feiffer’s name, which I’m sure is the only reason he took my call. He told me to come in the following Tuesday and bring a lot of work.

I showed up at the appointed time with around a hundred cartoons. Mankoff went through about 30 of them, never cracked a smile, told me most of them were terrible and before I could run to the door, said, “Show up every Tuesday with new work.” That’s the way of the The New Yorker, I suppose.

For the next six months, I showed up every Tuesday with 7 to 10 new cartoons. However, being a cartoonist wasn’t my day job nor was it George’s. Mankoff always would tell me how we weren’t funny or our jokes didn’t work and then he’d hold onto a couple to take into their final grouping of 50 to choose from for that week’s issue. Our problem, he lectured me one week, is that we were a team and he didn’t like the idea of teams. After a few months, he began to support our work more but eventually, we ran out of steam in the face of having other priorities. Maybe he was right about teams.

We didn’t view it as failure but as a call to take a different, more relaxed approach to cartooning and so we formed Gigundo Industries, the world’s largest, non-existent, virtual company, which is a subsidiary of an even larger, non-existent, virtual company called Enormco. You can visit the websites for either company at gigundoindustries.com or enormco.com and there you’ll find dozens of cartoons to look at and even buy for your presentations, brochures, etc. (A little crass commercialism doesn’t hurt now and then.)

The process of coming up with a good cartoon is not all that different from developing a marketing strategy. Strategy formation requires taking a complex set of both internal and external inputs and distilling them down to a single direction that fulfills unmet needs. Cartooning does the same but it ends with turning the situation upside down or placing it in a prison, doctor’s office, caveman times or some other real or unreal situation we can all envision.

Today, George and I come up with fewer cartoons but we always work on one for the holidays. Typically, we talk about the year’s news and try to work up ideas based on what people have been talking about that is still current or top-of-mind. Some years have been a lot tougher than others. I think the most difficult year for us was 2001 following 9/11. It was impossible to come up with an idea that would be funny or ironic. I don’t recall now what triggered the idea of the cartoon below that was the result, but it seemed right for the times. There was no caption. There was nothing that needed to be said.

2002 was an extraordinarily tense year and you’ll recall the heightened security everywhere in New York and in other major cities around the world. But at the same time, we began to laugh again and take ourselves a little less seriously. That was the year we sent this cartoon out:

By 2004, the country was beginning to relax a bit more but still always conscious of our enemies around the world. Santa, too, we thought, would have similar concerns and we came up with this.

By 2009, we felt we could move on to other topics and that was a year filled with the lunacy of the tabloids, or is that every year? We decided that even Santa couldn’t be immune from tabloid scandal and this cartoon resulted:

We’ve moved around to a lot of different topics including the economy, labor, health and nutrition and last year, focused on the 1% who have become so wealthy during the last decade, even Santa. All of our Christmas cartoons can be seen at the Gigundo Industries website and that brings me to 2012.

This has been a year in which we had a nasty and competitive Republican nomination race, a tough presidential campaign, the debt ceiling negotiations, President Obama’s re-election, the fiscal cliff and this past week, the horrific mass shooting in Newtown, CT of 20 young school children. There simply is nothing but shock, dismay and sadness that can be expressed about losing these beautiful children and six of their teachers in such an awful incident. The murders have been followed by outrage and arguing between defenders of gun rights and advocates of gun control. While the majority of voices seem to be on the side of doing something about the seemingly endless stockade of automatic weapons in this country, we again seem so polarized in every societal issue that comes before us. Where is there humor in that? It’s hard to find but when you think about Santa’s world, you have to wonder how our times are affecting him. Is his world as polarized as ours? Of course, we’d like to think not, but then Santa has to decide whether we’ve been naughty or nice and you have to admit this has not been an easy year for him to make that decision. That idea set our minds to wondering…and we came up with this for our 2012 holiday cartoon:

What else is there to say? We’ll all find out on Christmas how Santa decided. I hope that you and your families have a day filled with love, peace and joy.

Years ago, I saw a cartoon in the New Yorker called what lemmings believe. It showed hundreds of lemmings charging off a cliff but instead of going down to their death, they were flying up to the sky. Why else would they be so sure of themselves?

Being a part-time cartoonist (see GigundoIndustries.com), I thought of this cartoon the other day when reading about “the fiscal cliff” and the debate about whether going over it will harm the economy or is sure death…or perhaps, is the only sensible thing to do. I spoke to my illustrator partner at our cartoon conglomerate and the following cartoon was the result:

It’s “silly season” – so sayeth the politicians. It’s time to throw every piece of mud at the opposition simply because a lot of people will believe it. Fox, MSNBC, pundits who claim to know everything but in reality know nothing, and thousands of horrid political ads – it’s all a lot of noise that provides no reliable indicators on which is the best way to vote.

Can we look at some of the realities of the situation and some of the facts?

REALITIES:

Romney:

We don’t know what Romney would or would not do. Unfortunately, he’s changed positions so many times, it’s hard to figure whether he’s conservative or moderate. The “etch a sketch” metaphor has been mentioned and fair or not, it was created by his own campaign manager.

Yes, he did a great job with the Olympics. He had support and money from the government that he says isn’t working. It’s unclear how he did as governor of Massachusetts but one would think that if he did a great job, he’d easily win the state this time. Polls show he’s 15 points down. You want to tell me that’s meaningless? Please explain.

The only thing Romney has been consistent about is that he is a social conservative. He’s supported the idea of overturning Roe v. Wade, favors DOMA and won’t take a position on the Lily Ledbetter Act. If that’s what you want and you’re okay with his other murkiness, you should vote for him.

Obama:

Four years ago, we were headed toward a full-on depression. We’re not now.

Corporate profits had risen more than with any other president.

The stock market has risen 14.7% a year under Obama.

Housing values had fallen one-third on average at the end of the Bush administration. They’re rising again and have recovered much of the loss.

Now that we’re here, who can take us further?

FACTS:

The U.S. economy has done better with Democratic presidents than with Republicans.

Personal disposable income has grown nearly 6 times more under Democratic presidents.

Gross Domestic Product (GDP) has grown 7 times more under Democratic presidents.

Corporate profits have grown over 16% more per year under Democratic presidents (they actually declined under Republicans by an average of 4.53%/year).

Average annual compound return on the stock market has been 18 times greater under Democratic presidents (If you invested $100k for 40 years of Republican administrations you had $126k at the end, if you invested $100k for 40 years of Democrat administrations you had $3.9M at the end).

Republican presidents added 2.5 times more to the national debt than Democratic presidents.

The two times the economy steered into the ditch (Great Depression and Great Recession) were during Republican, laissez faire administrations.

Investment managers always point out that there’s no guarantee that past performance is an indicator of the future but given the choice between uncertainty and past negative performance versus a record and past positive performance, logic should say to select the latter. But when did logic and facts determine a U.S. presidential election?

Subscribe to Posts

Connect With Us

Recent Posts

Speed to Market

Stanford University Business School did a comparative study years ago on major factors that lead to a company's success. They studied an equal number of companies that had new business ideas. One group insisted on holding back until they felt they had perfected their product. The other felt their product was a little more than half ready but put it out to market early. The results a year later were startling. A significantly higher percentage of companies that went to market as soon as possible were well on their way to viability and profitability. Conversely, a significantly higher number of companies that thought they had perfected their product had failed or were heading in that direction. The reason? Immediate market feedback gave those companies that rushed to market the knowledge to better attune their products to market needs. The other companies had already used up their resources to apply to ongoing product improvement. Speed to market also applies to marketing campaigns. Quick to research, get feedback and adapt messaging makes for more successful campaigns. Velocity is a key factor in business success both for operations and marketing